Cytec's coating resins business is seeing a slowdown in demand in a number of its markets, particularly in Europe, its largest market, chief executive Shane Fleming said.
"We are currently reviewing all options for this business," Fleming told analysts during Cytec's third-quarter results conference call.
Fleming would not rule out a divestiture. Other options may include shutting down portions of the business. However, given that the various segments of Cytec's coating resins business share equipment, it would be challenging to "disentangle" the assets, he said.
In a step to improve the business, Cytec is closing its powder coating manufacturing site in Brazil, Fleming added. While Brazil remains an important growth market, Cytec did not benefit from having local production there, he said.
Cytec's coating resins business had third-quarter earnings of $18m (€13m), down 8% year on year from the same period a year earlier, as volumes fell by 10% because of weak demand in industrial markets. European volumes were down 14% year on year, North America was down 8%, and Asia was down 5%.
Sales in the segment rose 6% year on year to $387m, driven by price hikes that offset higher raw material costs and currency effects. Coating resins accounted for half of Cytec's total third-quarter sales of $778m.
Cytec's share price was up 7.47% at $40.26/share at midday on Friday on the New York Stock Exchange.
($1 = €0.73)
